Garsee v. Bowie

• Decision Date: 20 August 2003
• Docket Number: No. 37,444-CA.,37,444-CA.
• Citation: 852 So.2d 1156
• Parties: Michael David GARSEE, Plaintiff-Appellant, v. James Caldwell BOWIE, Defendant-Appellee.
• Court: Court of Appeal of Louisiana — District of US

852 So.2d 1156

Michael David GARSEE, Plaintiff-Appellant, v. James Caldwell BOWIE, Defendant-Appellee.

No. 37,444-CA.

Court of Appeal of Louisiana, Second Circuit.

August 20, 2003.

Leblanc & Waddell, Thomas H. Fields, III, Baton Rouge, for Appellant.

Paul Loy Hurd, Monroe, for Appellee.

Before WILLIAMS, GASKINS and TRAYLOR (Pro Tempore), JJ.

GASKINS, J.

The plaintiff, Michael David Garsee, appeals the trial court's grant of summary judgment in favor of the defendant, James Caldwell Bowie, dismissing the plaintiff's suit for specific performance of an agreement to purchase real estate. For the following reasons, we affirm the trial court judgment.

FACTS

In April 2001, Garsee and Bowie entered into an agreement for the purchase of eight multi-family residential properties in West Monroe. Bowie agreed to buy the properties for a total of $1.2 million in "as is" condition. The agreement to purchase contained the suspensive condition that Bowie obtain a 30-year first mortgage with a 25 percent down payment at a rate not to exceed 6 7/8 percent interest. The sale was to close on two of the buildings by April 28, 2001. The sale on the remainder of the properties was to close by May 1, 2001.

On April 14, 2001, the defendant filed eight separate purchase money loan applications with Hibernia National Bank (Bank), one for each of the units to be purchased. The Bank's interest rate was seven percent and the defendant agreed to pursue the loan at that rate. He then negotiated a loan with another lending institution for the 25 percent down payment and closing costs. The plaintiff contends that the defendant requested that the loan application with the Bank be converted from a 75 percent purchase money financing loan to a 90 percent "refinancing" loan. The plaintiff asserts that the defendant also developed concerns about the roofs as well as the electrical, plumbing, heating, and cooling systems. According to the plaintiff, the defendant attempted to renegotiate an adjustment in the price even though he agreed to purchase the properties "as is."

During this period of time, the parties agreed to extend the closing dates to May 20, 2001. The defendant expended approximately $178,000 to pay off mortgages on two of the properties in order to prevent the accrual of interest payments for the month of May 2001.

In early May, the defendant was informed by the Bank that the loan had been denied. At that point, the defendant declared the purchase agreement null and void and refused to carry through with the sale. The plaintiff contends that only the 90 percent refinancing loan was declined and not a loan for 75 percent of the purchase price, as specified in the agreement to purchase.

The plaintiff filed suit on May 23, 2001 for specific performance and damages. He claimed that the defendant did not make a good faith effort to obtain financing, causing the loan to be denied due to the defendant's own fault. The defendant filed an answer and reconventional demand claiming that the properties were not placed in the required condition. The defendant also alleged that the agreement to purchase failed by its own terms when he was not able to obtain the financing as set forth in the agreement.

Additionally, the defendant claimed that a second agreement was entered by the parties on April 30, 2001 whereby the defendant paid $178,400.54 on two of the properties to pay off the existing mortgages in order to avoid the accrual of interest for the month of May 2001. The defendant asserted that the plaintiff was required to reimburse him for this expenditure. The defendant also urged that the agreement granted him the right to purchase the two properties for $150,000 each.

On February 25, 2002, the defendant filed a motion for partial summary judgment. He argued that the purchase agreement failed when he could not obtain financing as specified in that document. Therefore, he sought dismissal of the plaintiff's suit for specific performance and for damages for the breach of the agreement to purchase. The defendant also sought enforcement of the second agreement with the plaintiff, allowing him to purchase two of the properties. The defendant further asserted that he was entitled to recover the $178,400.54 spent to pay off the mortgages on those two properties.

On August 13, 2002, the trial court entered summary judgment in favor of the defendant. The court found that the agreement to purchase failed by virtue of the defendant's inability to obtain financing. Therefore, the plaintiff's claims for specific performance of the agreement to purchase and to collect damages for breach of the agreement were dismissed. The court found that the plaintiff was obligated to reimburse the defendant for the $178,400.54 he spent to pay off the mortgages on two of the properties and specified that the defendant had the right to purchase the two tracts pursuant to the terms of the April 30, 2001 agreement with the plaintiff. The court ordered that the plaintiff pay the judgment within 30 days or be subject to contempt of court.¹

The plaintiff filed a motion and order for a new hearing on August 22, 2002, arguing that the reasons for judgment only dealt with the plaintiff's obligation to reimburse the defendant for the amount expended to pay off the mortgages on two of the properties, whereas the judgment covered all relief sought by the defendant. On November 26, 2002, the trial court denied the plaintiff's motion to reconsider. The plaintiff appealed.

SUMMARY JUDGMENT

The plaintiff claims that the trial court erred in granting summary judgment in favor of the defendant where genuine issues of material fact exist regarding the defendant's good faith, motive, and intent in this real estate transaction. The plaintiff argues that summary judgment is never appropriate where such issues are present. According to the plaintiff, there are issues of material fact as to whether the defendant made a good faith effort to obtain a loan in compliance with the requirements of the purchase agreement. The plaintiff insists that the defendant converted the applications for a purchase money loan to applications for a loan to refinance. He also maintains that the circumstances surrounding the conversion of the loan terms are highly disputed. The plaintiff contends that there is no showing that the loan for purchase money was denied by the Bank before being converted to a refinance loan. The plaintiff insists that the defendant's action in paying off $178,400.54 in mortgages on two of the properties is not indicative of good faith. According to the plaintiff, the defendant signed the purchase agreement to remove the properties from the market while he attempted to negotiate a more favorable price.

Legal Principles

Appellate review of a grant or denial of a motion for summary judgment is de novo. Independent Fire Insurance Company v. Sunbeam Corporation, 1999-2181 (La.2/29/00), 755 So.2d 226. A motion for summary judgment will be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact, and that the mover is entitled to judgment as a matter of law." La. C.C.P. art. 966(B). Summary judgment is designed to secure the just, speedy, and inexpensive determination of every action except those disallowed by La. C.C.P. art. 969. The procedure is favored and shall be construed to accomplish these ends. La. C.C.P. art. 966(A)(2); Independent Fire Insurance Company v. Sunbeam Corporation, supra.

A fact is "material" when its existence or nonexistence may be essential to the plaintiff's cause of action under the applicable theory of recovery. Facts are material if they potentially insure or preclude recovery, affect a litigant's ultimate success or determine the outcome of the legal dispute. King v. Career Training Specialists, Inc., 35,050 (La.App.2d Cir.9/26/01), 795 So.2d 1223.

The mover has the burden of establishing the absence of material fact. If the mover will not bear the burden of proof at trial on the matter, then he is required to point out to the court the absence of factual support for one or more elements essential to the adverse party's claim or action. La. C.C.P. art. 966(C)(2).

Once the mover makes a prima facie showing that there is no genuine issue of material fact, the opponent must produce factual support to avert the summary judgment. Speculation that a jury might not believe the mover's witness is not grounds to deny a summary judgment. Whether a particular fact in dispute is material can be assessed only in light of the substantive law applicable to the case. Allen v. State Farm Fire and Casualty Company, 36,377 (La.App.2d Cir.9/18/02), 828 So.2d 190, writ denied, 2002-2577 (La.12/19/02), 833 So.2d 343.

The party opposing summary judgment cannot rest on the mere allegations of his pleadings, but must show that he has evidence which could satisfy his evidentiary burden of proof at trial. If he does not produce such evidence, then there is no genuine issue of material fact and the mover is entitled to summary judgment. La. C.C.P. art. 966(C)(2); Johnson v. Entergy Corporation, 36,323 (La.App.2d Cir.9/20/02), 827 So.2d 1234.

The court should draw those inferences from the undisputed facts which are most favorable to the party opposing the motion for summary judgment since summary judgments deprive the litigants of the opportunity to present their evidence to a jury and should be granted only when the evidence presented at the motion for summary judgment establishes that there is no genuine issue of material fact in dispute. Johnson v. Entergy Corporation, supra; Independent Fire Insurance Company v. Sunbeam Corporation, supra; King v. Career Training Specialists, Inc., supra.

Our summary judgment jurisprudence sets forth the principle that weighing evidence and making credibility determinations have no place in the summary...